From: Michael Keeling [mailto:Michael@esopassociation.org] 

Sent: Wednesday, January 12, 2011 11:18 AM 

To: EBSA, E-ORI - EBSA 

Subject: Fiduciary Definition Hearing

January 12, 2011 

Employee Benefits Security Administration 

Office of Regulations and Interpretations 

200 Constitution Avenue, NW 

Washington, DC 20210 

By email: e-ORI@dol.gov 

Subject: Fiduciary Definition Hearing 

Dear Assistant Secretary Borzi: 

On behalf of The ESOP Association, a 501[c][6] trade association with 2,400 members 

nationwide, I respectfully request that a representative of the Association testify at the March 1, 

2011, public hearing on the proposed regulation, Definition of the Term "Fiduciary." [Published 

October 22, 2010 Federal Register, page 65263-65278.] 

The ESOP Association since 1978 has been the largest advocacy entity for corporations 

sponsoring employee stock ownership plans [ESOPs] in the U.S. 

Of its 2,400 members, 98 to 99% are not publicly traded, and 91% employ fewer than 500 

employees, and of these, 50% or so employ 50 to 100 employees. Thus the proposed rule would 

have a direct impact on these businesses sponsoring ESOPs who must have an independent 

valuation of their ESOP annually, at a minimum. 

For the past 30 plus years, representatives of the Association have presented oral testimony to 

committees of Congress and to regulatory agencies with jurisdiction over laws and regulations 

that impact ESOPs. 

In addition to the near 1,500 corporations, the Association has as secondary professional 

membership of approximately 900 service providers who offer services to ESOP sponsors. 

Approximately 100 of these secondary professional members value ESOP stock issued by 

privately held companies sponsoring ESOPs. Thus, needless to say, the Association’s corporate 

members sponsoring ESOPs and its secondary professional members wish to be heard on the 

proposed regulation to mandate all valuators of privately held companies sponsoring ESOPs be 

ERISA fiduciaries to the ESOPs. 

As is traditional when the Association has a representative testify at a regulatory hearing, the 

Association asks that the chair of its Advisory Committee on Legislative and Regulatory Issues 

be its representative. 

This person is currently: 
Laurence A. Goldberg 

Partner 

Sheppard, Mullin, Richter & Hampton 

4 Embarcadero Center 

17th Floor 

San Francisco CA 94111-4158 

415-774-2927 phone 

415-403-6091 fax 

lgoldber@sheppardmullin.com 

Before the March 1st public hearing, the Association will submit a written comment on the 

proposed regulation defining fiduciaries before the deadline to comment, February 3, 2011. 

Attached is a general outline and proposed oral testimony by The ESOP Association 

representative. 

If inquiry, comments, or notification is required, please contact me, the undersigned. My contact 

information is included in this email. 

Your consideration of this request is appreciated. 

Sincerely, 

J. Michael Keeling, CAE 

President 

The ESOP Association 

1726 M Street, NW 

Suite 501 

Washington, DC 20036 

202-293-2971 phone 

202-293-7568 fax 

Michael@esopassociation.org 
Outline of the Proposed Oral Testimony of The ESOP Association’s 

Representative at the March 1, 2011 Department of Labor’s Public Hearing 

on the Proposed Regulation of ERISA Fiduciary Definition 

I. Brief overview of demographics of ESOP Association and members 

II. Economic impact on ESOP plan sponsors if proposed rule is finalized as 

drafted 

III. Thirty plus years of history of ESOP Association members and DOL audits 

triggering valuation disputes 

IV. Current law and/or finalizing regulation on adequate consideration can 

address issues of “rogue” valuations 

V. Would proposed rule alter “best practices” of valuation community’s 

methodologies of valuing ESOP transactions 

VI. Summary of laws governing ESOPs as national policy 

VII. Conclusion: Proposed definition of a fiduciary should not discourage 

employee ownership and retirement savings through the ESOP model